Living in a Whirlwind, or the Food/Energy/Work Crisis

Every map is a compromise between scope and resolution – the larger the area documented, the less you can know about the places that make up that area. A high resolution makes details and differences visible, but loses the broader context.

I wrote this article as a map of sorts. It serves as an overview of the current food, energy, and financial crises, with attention to how those crises reflect working class struggles. The people and places that make up those abstractions are largely absent from view. The reader will find here the great clanging gears of production, circulation and the collective metabolism and momentum of the working class. While I hope that such a view from above is of use for plotting a course on the varied and uneven ground that we all live on, those missing details are the most important things of all. I alone am responsible for any errors that follow.

May 18th, 2008

We are living in a whirlwind. Like Dorothy in The Wizard of Oz looking out the window in the midst of a tornado, we see daily economic life take on unfamiliar and bizarre forms, transforming the mundane into the unknown and alarming. Like Dorothy’s schoolteacher transformed into a witch, monstrous things now spin around us – a world in which rice needs armed guards, money vanishes overnight only to return the next morning on a Red-Eye from Dubai shrunk by half, cars eat food, people eat oil, and no one ever gets full. And it all seems to be happening so fast and from one hundred places at once. To paraphrase Marx, rather than melting into air, all that was apparently solid has now been flung up into the air, and we are all along for the ride.

This journal isn’t alone in referring to these times as a whirlwind. The World Food Programme (WFP) writes that the world faces “a perfect storm” and a “silent tsunami” of hunger[1]. The president of El Salvador says: “This scandalous storm might become a hurricane that could upset not only our economies but also the stability of our countries [2].” In Vietnam, the newspapers write about the struggles of living in a ‘price storm.’

Meanwhile, oil companies and agribusiness are making huge profits. In the first quarter of 2008 alone, Shell had a profit of $9.08 billion (a 25% increase), and BP had a $7.62 billion profit (up by 63%)[3]. Between 2006 and 2007 profits were up for others as well: Cargill $2.3 billion (up 36%)[4]; ADM $2.2 billion (up 67%); ConAgra $764 million (up 30%); Bunge $738 million (up 49%). In 2006, among countries with capital surpluses, ‘petrodollar’ foreign investments made up about a third of net global capital outflows, and the oil money in the Persian Gulf countries’ foreign investment holdings equaled $2 trillion.[5]

While these storms have been building for the past several years– and in the past several months especially– now everything seems to be accelerating. Images of nodding well-heads and gas flares transform into corn fields and grain silos, long bread lines in Cairo blur with the crowded floor of the Chicago Mercantile or New York Stock Exchange. A skyrocketing trend line could just as easily be the rate of inflation in China, the number of home foreclosures in Arizona, the price of rice in Bangkok, or the barrel of oil that seems to cast its shadow over them all.

The Food/Energy/Work Crisis

A crisis is never just a matter of catastrophes and the responses that attempt to bring them to a halt and fix the damage. Crisis is also a form of planning or strategy. That’s doesn’t imply conspiracies or cabals pulling the strings, nor does it diminish the role of droughts, crop failures, real shortages of oil relative to demand, world population growth, or other factors in the contemporary crises. Crisis is strategic not because it’s manufactured. It is strategic because the way crisis arises and how crises are managed– which solutions are chosen and which ones are passed by– aren’t obvious or inevitable, but rather reflect the power and interests of the social, economic, and political forces involved.

We live in a world deeply marked by the historical and geographical struggles of the working class for control over their labor and the conditions of that labor. Capital is a political-economic system that derives profit from the unpaid labor of the working class. The contemporary financial, food, and energy crises are all components of the struggle between the working class and capital.

Food and energy comprise a large part of both the costs of producing labor-power (the cost of living and bringing up new workers) and of most other kinds of production. This can be either indirectly (through wages for food) or in the case of energy, both through wages and directly at the point of production by replacing labor. When the prices of energy and food increase more rapidly than wages and other compensation, real wages decline and the overall rate of exploitation by capital increases (even while agribusiness and energy corporations make windfalls and other businesses or sectors suffer difficulties and losses).

Food crisis and energy crisis are further interlinked because the price of food is in large part the price of energy. The cost of tractors, rototillers, water pumps, fertilizers, pesticides, and transport costs are in large part a reflection of the cost of oil. Now with the development of bio–fuels, the circle is completed – energy can be conjured out of food as easily as food from energy, linking food and energy prices even further, making the price of oil that much more of a global lever commanding the cost of living.

Food and energy hikes are the compulsion of work and/or the direct looting of workers’ accumulated wealth by capital. Food and energy prices along with financial implosion, are driving wages for a great many people below the costs of social reproduction (the cost of producing more labor-power) – meaning the depletion of workers’ accumulated wealth by capital. Food riots, energy strikes,boycotts, demands for subsidies and wage increases, as well as the autonomous production and distribution of energy, food, and credit are forms of worker refusal of this forced labor and/or pillaging. What is at stake is not just food or energy or credit as such, but also the relative share by workers and capital of the total value of social production.

All of these crises are work crises because the commodities in crisis are the raw materials for making labor-power. Even though the precise mechanism of exploitation is neither the stretch-out nor speed-up of work, it’s still more work for less (or no) pay, under pain of starvation or exposure.

That is why I refer to the overall contemporary situation as the food/energy/work crisis, or simply The Whirlwind – a term that’s not only simpler, but also captures the manner in which these simultaneous crises have fused together into something larger which throws all before it into confusion. At heart, the Whirlwind is an escalation of the ongoing compulsion of work and a counter-escalation of working class refusal of work. The Whirlwind is born as much out of capital’s own precarious situation as its power and strength.

Fictitious capital and primitive accumulation

Why is this happening here and now? What does a crisis in financial markets have to do with the price of food and energy? Said differently, how is the triple crises related to each other – if there is a strategy behind all this, what is it?

The answer, in brief, can be summed up by just two phrases: fictitious capital and primitive accumulation. Fictitious capital refers to financial capital: securities, bonds, stocks, debts, futures, derivatives, and so on. What makes it ‘fictitious’ is that its value is based on claims to profits that do not yet exist and may never exist in the future. Value is detached from the real world of labor value and production into a netherworld populated by electrons, exchange rates, pork bellies inside living hogs, and not yet sprouted coffee beans. What makes fictitious or financial capital important in modern capitalism is its ability to spread risks throughout time and space, to balance out rates of return, and to push into the future or elsewhere on the planet any shortfall of profits. However, this is also its problem. The paper value of fictitious capital can in theory reach infinitely high levels based on its own occult rules, bearing no relation to actual production. However, the realization of those profits still requires real commodities to exchange for those paper promises. Accumulating those commodities necessarily means a fight with the working class over its relative share in the total social product. Fictitious capital generalizes not just the accumulation process but also class struggle.

Since the 1970s the finance industry has introduced new forms of fictitious capital: hedge funds, credit default swaps, sub-prime mortgages, liquidity puts, collateralized debt obligations, and so on. These new kinds of securities deliver high returns, but they also bring unpredictable risks. Indeed, they have become so complex that the heads of the banks selling and buying them apparently don’t know what they are, never mind how they work.[6] These new kinds of financial instruments reflect the ongoing ‘financialization’ of capital – the ever-greater gulf between ballooning investment in fictitious capital and stagnating real long-term economic growth.[7] The devaluation of all this funny money has been long in coming, and the current devaluation is spreading from the paper values held by the mortgage lenders to their banking partners, now to major international investment houses like Bear Sterns, whose assets evaporate overnight so that the stability of the entire global financial system has come into question.

Accomplishing devaluation is neither a technical matter of clearing away bad debts, nor a private affair of capital. It is political and it is another aspect of class struggle. Nobody wants their money included among the many billions of disappearing dollars, but those losses have to be forced onto someone, somewhere, eventually. Just because the financial crisis is capital’s problem doesn’t mean that capital is going to pay for it if it can find somebody else – the working class – to foot the bill.

The food and energy crises are key ways capital is trying to displace the costs of devaluation onto the working class. (Foreclosures, the manipulation of interest rates, and the outright bailout of banks with public money are other important measures). The transfer of workers’ wealth through energy and food costs to the energy sector is then conveyed in a concentrated form to save (by buying up) the banks in crisis. That is where primitive accumulation meets fictitious capital.

Primitive, or original accumulation, otherwise known as “accumulation by dispossession,” are just fancy ways to describe getting something of value from somebody without paying – in other words, robbery or looting. While the name harkens back to the dawn of capitalism (Marx concluded Volume 1 of Capital explaining the origins of capitalism this way), primitive accumulation is alive and well and in fact grows in proportion with the expansion of the most modern forms of finance capital and high-tech industry. Both Rosa Luxemburg, in her The Accumulation of Capital (1913), and David Harvey in his recent works (The New Imperialism and A Brief History of Neoliberalism) explain why these seeming opposites develop interdependently.[8] Essentially, primitive accumulation draws new labor-power and loot into capital so as to counteract the growing divide of real productivity (specifically capital’s falling share of it under conditions of working class struggle) from fictitious capital’s ever-expanding claims on that productivity – it’s the ‘off the books’ income that keeps the balance sheet of capital out of the red.

By transferring wealth from billions of workers into the energy and food sectors, the price hikes we’re seeing are the primitive accumulation of the surpluses necessary to bail out ailing financial institutions so as to avoid larger, more destructive, devaluation. It is looting because it’s not about imposing longer hours or greater productivity (although it certainly can cause that), as much as it is about imposing a tribute we all have to pay if we want to stay alive. Once looted, the money enters a circuit of exchange that fairly quickly gets it to the financial institutions that are in crisis, keeping them solvent.

Think about it like this: You pay $40 at the gas station to get back and forth from work; so do 100 million other people each week in the U.S. Those petrodollars pile up in a bank in the United Arab Emirates. Then they return to bail out New York investment banks stuck with bad loans to the mortgage companies, who are foreclosing the houses of the people buying the gas to start the circuit.

However, primitive accumulation by the food and energy sectors does more than prop up fictitious capital. It is also a means of gathering the money necessary for a new round of investment. While the money is drawn from every pore of society, often in tiny quantities, it’s being reinvested at the opposite end of the spectrum in highly capital-intensive energy even riskier forms of fictitious capital, like the commodities market. Also, the further formation of extremely high organic composition energy capital (meaning almost all investment is in plant and equipment and a relatively miniscule amount in labor) reinforces capitalist command over energy to impose more ‘sweating’ of workers.

Investments in commodities have tripled since 2001 and the number of contracts has more than quadrupled in the same time.[9] Speculation on commodities is driving oil and grain prices up (some estimates are of 10-20%), making for a particularly perverse outcome – the more primitive accumulation by price increases, the more money for speculation, and the more speculation, the higher the price increases. Here we see the pinnacle of the Whirlwind’s logic – transforming food into fictitious capital. We saw this first in the 2007 Mexican ‘tortilla crisis.’ This involved several factors.

Through the North American Free Tree Agreement (NAFTA) Mexico opened itself to unlimited imports of maize, its staple food.[10] There has also been massive consolidation in the grain trading, tortilla manufacture, and grocery retail sector. The apparent manipulation of the market and a complacent or complicit government, caused corn prices to jump 50% in three months even though harvests were good and international prices stable.[11] This year, a rice crisis has developed bearing many of the same marks, but affecting many times more people.

Class struggle and the Whirlwind

Leaving matters here would have capital leaping from strength to strength across the globe while humanity suffers in silence or only makes ‘local,’ ‘particularist’ (and thus presumably futile) resistance to these crises. This would be no different than radicals who alternate between asserting the inexorable, evil genius of capitalist strategy and appealing to a future socialist state to feed us. [12] Absent from such analysis is a fundamental reality: the ubiquity and potency of autonomous working class struggles, acting as not only resistance to capitalist planning, but as the prime driver of history (including those capitalist plans themselves). This is as true now as ever before.

The Whirlwind is a sign not of capital’s unparalleled power, but the fact that it is in deep trouble. The entire structure of fictitious capital may finally be poised for a general, and thus catastrophic, devaluation. In the U.S. alone, public and private debt has increased seven-fold in the past quarter century and is now more than three times larger than the annual GDP.[12]

It is not strength but desperation that compels the Whirlwind. Energy crisis, and even more so food crisis, is a highly dangerous strategy of accumulation because it directly challenges people’s living standards (or their ability to live at all). The global coordination of energy and food prices and their circulation through almost every corner store, gas station, and kitchen on earth, serves to circulate class struggle, leading to the rapid recomposition of global working class struggles around those food and energy cost spikes.

The class composition of the working class means its diversity (including the division of labor, waged and unwaged workers, nationality, gender, age, sexuality, legality, and other kinds of difference) and the degree of unity and class power it is capable of exercising vis a vis capital. What they have in common is not the work they do, but that they work and struggle against capital’s appropriation of that work. To say the global working class is recomposing itself inside the Whirlwind doesn’t mean everyone is receiving orders from a vanguard party or following a common program – quite the opposite. It means that class struggles, in their varied and multiple forms, are taking on a more unified aspect (again, driven largely by the crisis itself) that translates into greater working class power.

Refusals of price increases, austerity and work are widespread, often successful, and extremely disruptive of the deployment of the food/energy/work crisis. They are spreading as rapidly and as widely as the crisis and increasingly their disparate elements are coming into awareness of each other.

All over the world controls upon inflation are prescribed by Central Banks, Prime Ministers and so on as the means of surviving the Whirlwind. And on the face of it, controlling inflation is a good thing – after all, rising costs are at the heart of the problem. Yet this term has two diametrically opposed meanings, each reflecting one side of the dialectic of class struggle. For inflation means the erosion of real value – devaluation. And avoiding devaluation means different things to different classes. For workers, controlling inflation means reducing the cost of living or otherwise running up wages to keep pace with costs. For capital, fighting inflation means imposing austerity in wages and standards of living. Controlling inflation for capital means keeping the working class from countering the ‘price storm’ by taking back from capital at the job what is taken from it at the grocery or gas station. Because if the working class is capable of throwing inflation back upon capital with wage increases or other forms of refusal of the cost increases, it threatens to strangle the flow of fresh blood into an already-anemic fictitious capital.

Thus the appeals for controls on inflation by officials by officials have a certain dualistic quality – crocodile tears in abundance for the poor, and a warning against other workers who want ‘too much,’ or are ‘unreasonable.’ An EU official describing the toll that inflation has had on the poor and the measures to be taken to address the problems explained how he “cautioned against wage settlements that incorporate these price rises into pay scales” in most of the EU countries.[13] The objective of the managers is to spread the pain around. Austerity and the struggle against it circulate- In both cases, the objective is ‘fighting inflation.’

These are the abstract conditions upon which the present crises stand. Capital has conjured up the Whirlwind to save itself by imposing crisis on the global working class. We lack ruby slippers to whisk us back to before it carried us aloft, so we are just going to have to ride it out. But if capital has flung the house of humanity up into the sky, humanity also possesses the power to land that house squarely on capital’s head.

Historical-geographical comparison of working class struggles in the Whirlwind

In many ways, we’ve been here before – specifically, in the energy crisis of 1973-1981, although the causal factors aren’t the same. The main impetus of the last energy crisis was neither an Arab oil embargo nor inherent ‘Limits to Growth.’ Rather, working class wage, welfare, and development offensives in the prior decade dried up profits and threatened capitalist control of production. Energy crisis, then as now, is a means of ‘recycling’ value from wages back into capital through higher prices, but was deployed in the 1970s oil shocks in a very different context. Then, energy prices acted to undermine centers of worker militancy in the assembly-line industries and inner cities (for example, the deindustrialization of the ‘Rust Belt’ and Gerald Ford’s ‘Drop Dead’ to the New York City fiscal crisis). The second result was to concentrate capital into higher organic composition sectors (especially energy and information technology), seeking to counter the wage offensive and restore profits by re-centering accumulation on industries requiring relatively little labor while drawing wealth from every other part of society.

In a 2008 retrospective on U.S. wages, the New York Times laid it all out for us:

The slowdown began in the 1970s, with an oil shock that raised the cost of everyday living. The technological revolution and the rise of global trade followed, reducing the bargaining power of a large section of the work force. In recent years, the cost of health care has aggravated the problem, by taking a huge bite out of most workers’ paychecks.

Real median family income more than doubled from the late 1940s to the late ’70s. It has risen less than 25 percent in the three decades since.[15]

The median real wage of American workers surged in the 1960s boom and continued to increase during the energy crisis years. However, during the 2000-2007 ‘Bush boom’ preceding the Whirlwind, median U.S. wages actually fell in terms of real value. Stagnant wages make American workers more vulnerable to food and energy cost increases: Food stamp use in the U.S. is at the highest rate in over a decade and food price increases, already double their long-term average, are soon expected to approach the huge increases of the 1970s, 7-9% per year.[14]

That’s not to say that American workers are doing nothing. Consider the actions of undocumented workers, independent truck drivers, and dockworkers. The mobilizations of March, April and May 2006 manifested the recomposition of one of the largest blocs within the American working class, essentially nullifying the most extreme proposals for criminalizing some 14 million workers. One element of the Great Strike of 2006 was the shutdown of the Los Angeles port on May 1st by short-haul ‘trocqueros’ over soaring diesel prices, flat wages and immigration raids. The strike was a continuation of trocquero wildcats in the two previous years at major ports (in 2007 the Port of Los Angeles decided to declare May 1st a holiday). [15]

This militancy is not confined to trocqueros. Transport sector workers are among the most visible in the U.S. in facing the Whirlwind. This includes those few in highly strategic workplaces, such as the West Coast dockworkers’ union (ILWU) that shut down all Pacific Coast ports for May Day 2008 and the far more diffuse, but numerous, independent long-haul 18-wheeler truckers.

Among American workers, truckers are perhaps the most heavily impacted by the energy crisis, bearing huge losses because their clients aren’t paying enough for them to recoup their expenses (another form of primitive accumulation). On April Fool’s Day 2008, truckers started using their trucks as a diesel-powered Critical Mass on the nation’s freeways, snarling traffic in several cities and disrupting business at ports by driving slow and blocking lanes.[19] In April, there were slow-downs at the ports of Tampa and Savannah, Georgia, rallies at state capitols, and a national rally in Washington that included not just long-haul rigs, but also dump truck drivers from DC.[20] Word is spreading through websites, CB radio, and public gatherings, like those that Truckers and Citizens United is holding at truck stops around the country.[21] Truckers’ tactics, using their means of production and the public highways to disrupt circulation of goods are both highly disruptive and hard to counter.

The truckers’ leaders express both an understanding of working class autonomy – “If all the truckers decide to shut this country down, there’s going to be nothing they can do about it” and their capacity to circulate the refusal of energy price hikes throughout the working class – “It’s about everybody–the homeowners, the construction workers, the elderly people who can’t afford their heating bills… This is not the action of the truck drivers, but of the people.”[22] The organization Truckers and Citizens United is an interesting mix of nationalist (meeting with politicians, boycotting Middle East oil) and radical responses (organizing a May Day drive-through of Manhattan with the IWW) to the energy crisis. According to Truckers and Citizens United, the truckers’ demands include, in addition to minimum wages sufficient to cover their costs:

– Immediate stoppage to the subsidies being given to big oil.
– A reduction in tax credits being given to big business.
– No selling out of Interstates to foreign countries like the Indiana toll road.
– Stop the NAFTA Super Highway project…which will destroy the quality of this great nation.

Somebody must be getting nervous about the trajectory of all this because the permit for a truckers’ NYC May Day rally was cancelled shortly before the action was to take place. Both the Democratic and Republican Parties have been largely absent in mediating (and thus containing), these ‘high-entropy’ transport workers. Similar to the anti-nuclear movement in the 1970s, the resistance of specific populations to energy price hikes has the potential to circulate throughout the working class. The concern here is not so much the elitism of the core group but the possibility that this anger and momentum will be turned away from anti-capitalist tendencies towards bashing Arabs and OPEC. Truckers have a very different class composition than the No Nukes movement, which was composed largely of rural New Englanders, particularly ex-urban intellectuals. In the No Nukes case, its principal weakness was the lack of appeal to broader, working class refusals of energy price hikes, instead opting for visions of solar employment and labor-intensive farm work.[24] Appealing to the working class isn’t a question for the truckers so much as the course that their analysis and actions will take.

As much as these transportation workers represent a narrow but sharp edge of the American working class, wage pressures in the U.S. are not yet countering the energy, food, or financial crises. One part of the world where such wage struggles do seem to be strongly implicated in the Whirlwind is East Asia.

East Asia (specifically China), as well as parts of Southeast and South Asia became the ‘Workshop of the World’ in the period of capitalist expansion between the energy crisis of the1970s and the present crisis. Accumulation centered on the circuit between U.S. fictitious capital and East Asian manufacturing exports. Foundations of this trans-Pacific circuit included cheap food and cheap energy, thereby reducing the costs of industrial production and the reproduction of labor-power. As well, an expensive U.S. dollar fueled a consumption boom and ballooning debt in the U.S.; this debt was bought up by those same East Asian manufacturing states that supplied the exports, completing the circuit.

U.S. debt financed new highways, hotels, and industrial parks in Asia, while the primitive accumulation of land, labor, and resources discounted the cost of reproducing laborers and the means of production. In recent decades, 120 million Chinese people have moved from the countryside to join the floating population of industrial workers. This is due to a widening of income inequality between city and country, as well as the combined burdens of low prices, high taxes and land seizure faced by farmers.[25] Just a few years ago, it seemed this circuit could go on forever, but then the foundations of the circuit vanished: the dollar fell, oil and food prices shot up, and financial capital went into retreat.

It was then that we started to hear about the Chinese ‘labor shortage.’[26] This might seem contradictory: a labor shortage in the world’s most populous country, with millions of people pouring off of farms and out of downsized state enterprises every year. Business Week translated the enigma, writing candidly that the problem is “managers can no longer simply provide eight-to-a-room dorms and expect laborers to toil 12 hours a day, seven days a week.” Labor shortage, decoded, is a weakening of capitalist command over the labor force. It is the refusal of Chinese workers to bear the dispossession and non-reproductive wages that drive migration to the cities and coastal provinces, as well as the subsistence wages, barracks housing, and poor food that await them once they arrive.

One factor of this is the resistance by farmers and workers to what might be called ‘primitive accumulation with Chinese characteristics ’ [27] – unpaid wages, land seizures, sacking of state-owned enterprise workers through privatization, police harassment of informal-sector workers, and recent transport cost increases. The Chinese government itself was willing to estimate that there were 74,000 ‘mass incidents’ in 2004, involving everything from petitions to riots and arson. These ‘incidents’ involved 3.5 million people, a four-fold increase from a decade before.[29] In order to counter these refusals and rebellions, new subsidies and tax relief have been extended to farmers and poor rural workers. This has had the effect of slowing down rural to urban migration. This shrinking reserve army of new laborers for industry makes it that much harder to check the widespread (and growing) wage struggles of workers.

The rapid escalation of oil and grain prices has a double effect on wage struggles in China: On one hand, the cost of living eats into working-class buying power, eroding real wages; on the other hand, rising costs serve to accelerate the wage push by workers. Workers go on wildcat strikes demanding higher pay and lower living expenses while employers and the State labor union negotiate wage increases. These increases are usually lower than workers’ demands, or come attached to employer plans for increasing productivity or cutting expenses on food or other benefits, thus setting off new rounds of struggle.

Chinese workers face a big obstacle to generalizing their struggles. The autonomous organization of workers generally, and organizing between enterprises particularly has resulted in repression by the police.[30] Given the rapid increase in food and energy prices, the wage increases workers are winning have only allowed them to tread water against the rising cost of living. Despite these problems, the scale of autonomous wage struggles in East Asia can be seen indirectly. For their employers, these small scale actions compound into an attack on their profit margins waged at a nation-wide scale. Employers have also been unable to translate rising wages into productivity increases to recover their profitability,[31] leading the multinationals to seek even lower wages in inland China, Vietnam or Indonesia.

However defensive and isolated in their specific instances these struggles may be, their collective effect has been to drive the global circulation of inflation through the rising price of Asian manufacturing exports. It’s yet to be seen to what degree capital or the working class will bear these costs- currently, they’re being tossed between subcontractors in China, parent companies in South Korea or Japan, retailers in the U.S. or Europe, and all the people who work or shop at these places. Wherever this inflationary hot-potato finally lands, industrial workers in China and the other export-oriented ‘Tiger economies’ are pushing energy and food costs partly off their own backs through their wildcat wage struggles.[32]

But even as capital runs off to Vietnam, it’s finding an equally hostile reception to sub-survival wages. Waves of wildcat strikes in footwear, textiles, seafood processing, shipbuilding, and toys have followed manufacturers seeking low labor costs and to offset their dependence on China. In response to a strike wave in 2007 and rising inflation, the Vietnamese government raised the minimum wage by 12% overall and of 25% in the foreign-owned, export-oriented sector.

Yet this has not stopped the wage pressures and wildcats, which have grown in size and organization in 2008. Just before the Tet holiday in January, workers launched a new round of strikes from the North near Hai Phong to the urban periphery of Ho Chi Minh City. They sought to force the implementation of the new wage tables on resistant bosses and to push up the wages of older, more skilled employees who didn’t benefit from the minimum wage increases. Vietnamese workers also struck against insufficient and disgusting food in the factory cafeterias and against employer plans to work them on the day before Tet, when people have traditionally left for their family homes in the countryside. In March, workers at a Nike shoe factory in Long An province near Saigon (where the January strike wave was particularly intense) struck for a 22% wage hike, which the State and the factory negotiated down to 10%. When workers tried to return to work, those that didn’t accept this dilution of their demands and fought with security guards and other workers, forcing the factory to close again.[33]

One of the debates swirling through the Whirlwind is the role that rising prosperity in the Global South has played in absorbing global food surpluses. The boundaries of this debate are generally that it’s either the fault of fat Americans, or of the Indians and Chinese that want to be like them. A bit of history is useful here. Let’s remember the big grain deal that prefigured the last food/energy crisis – the wheat sales from the U.S. to the USSR in 1972. The Russian grain sales were a geopolitical strategy of the U.S. government to negotiate with Russia and China, but more importantly for this discussion, they were a bid by the Soviet government to increase the quality of food for industrial workers without further exploitation of Eastern Bloc farmers, both of whom were particularly volatile after decades of ‘socialist primitive accumulation.’[34] Rising real wages, improved diets, and food imports in India and China in recent years have many causes to be sure, but those causes include the class struggles of farmers (refusing to sell products for nothing) and industrial workers (demanding higher wages and better food), as sketched out in the previous pages about East Asia.

At the bottom of the global accumulation pyramid are the large numbers of unwaged or precariously waged workers in Middle East, Africa, Southeast and South Asia, Latin America and the Caribbean. For these people, food prices have life-and-death implications, especially since so many have moved from the countryside to urban areas following earlier waves of primitive accumulation. This not only includes the formal era of imperialism from the 1880s to 1960s but the combined effects of the debt crisis, the collapse in commodity prices, and IMF structural adjustment programs of the 1980s and 1990s that separated millions of people from means of subsistence like land, state employment, and natural resource revenues.[35]

Indeed the current moment is almost a repeat of the late 1980’s anti-IMF intifada. Drawing from the experience of the Palestinian uprising, riots against IMF policies spread far and wide, to Algeria, Venezuela, Jordan, and elsewhere, demanding the end of austerity measures. Austerity had reduced real wages significantly while billions of dollars in public funds went to servicing foreign debt. There is no doubt that the experience of those earlier struggles is a resource guiding current situations. According to the Food and Agriculture Organization (FAO) of the UN[37] ), the proletariat of 37 countries are in revolt against rising food prices. Many of these countries are chief allies of the U.S. Egypt, for example, is the second-largest recipient of U.S. foreign aid in the world. Food imports and subsidized bread are, apart from the army, one of the few tools available to the Mubarak government to keep power. In Haiti, which has drawn the most attention, food riots are destabilizing a regime that was installed by a U.S.-engineered coup in 2004 against President Jean-Bertrand Aristide. Iraq, currently the most important country to U.S. foreign policy, is one of six countries facing the most severe food crisis according to the FAO. Iraq was first a major importer of U.S. grain during the Iran-Iraq war. In following years, it was subjected to twelve years of hunger through sanctions that killed perhaps 600,000-1 million people. Five years after the U.S. invasion, the food situation in Iraq is actually markedly worse than before 2003. and in the past year the subsidized food available to Iraqis was cut in half.[38]

State responses to the explosions caused by food price hikes often takes the form of urban war, whether by local and national police or armies in any of thirty countries, UN Blue helmets in Port-au-Prince or the U.S. Army in Sadr City. Yet the struggles circulate as fast as prices rise through telecommunications and mass media. Thus the efforts at containing the circulation of images, ideas, experiences, as evidenced by actions such as the raids on TV stations in Senegal reporting on food riots.[39]

Where all this is heading isn’t clear. Capital is not above using famine to compel work. This was the case in the 1970s in the Sahel, the Horn of Africa, Bangladesh and Chile,[40] where “food for work” meant the driving down of wages to the absolute minimum and associated seizure of resources and land. Yet that may not be the fate of a great many places. In some countries, the scale and power of mobilizations have compelled governments to reduce the price of food, largely by entering into more debt. Such measures are leading to new crises elsewhere in the economy while raising questions as to who will get the subsidies and who will pay for them.

In the case of Vietnam, the national government has frozen the price of fuel for the next six months and is limiting rice exports, as well as propping up their currency’s value. But these efforts are leading to a severe shortage of credit and the inability of businesses to convert U.S. dollars into Vietnamese money. This leads to farmers not receiving payment for their produce and being unable to purchase fertilizer and seeds except through moneylenders who charge triple the normal interest rates. This has the potential to cascade into a severe crisis for the entire export-oriented agriculture and aquaculture sector of the country.

In Argentina, cattle ranching, dairy, and wheat production have largely been pushed aside to make way for the planting of soybeans for export. In order to deal with the response of the urban population to the food and energy crises, the government sought to increase the tax on soy exports, one of the only prosperous economic sectors in the country. Farmers, who find in soy the last refuge of production, see the money from this tax going to Buenos Aires and not to their rural provinces. Thus farmers blockaded the highways, preventing the transport of food to the capital city for a month in February-March 2008. While soy production is largely for the profit of domestic oligarchs and international agribusinesses [41], the small farmers that remain see the tax as a last straw that could break their ability to survive.[42]

The blockading of national capitals over food and energy prices is not restricted to Argentina. In a modern version of Mao’s encirclement of the cities, the tactic of immobilization is being deployed in Nicaragua, where transportation workers are waging a thirty-day strike demanding reduced and stabilized fuel prices. Inside Managua, road blockades have been set up to stop traffic while taxis have to drive around with their signs obscured.[43] Will these struggles devolve into fights between rural or transport workers and urban workers dependent? Will workers’ struggles in nations where ‘Left’ governments hold power act to strengthen those reformist regimes, or undermine them?

The elements of working class counter-offensive are also coming into place. In South Africa, the recent wave of protests over the inadequate (or nonexistent) delivery of housing, water, and electricity to shack settlements [44] is articulated through long-standing movements around privatization, basic services, and the realization of the economic objectives of the ANC Freedom Charter and the anti-Apartheid struggle.[45] The international farmer’s organization, Via Campesina, has developed the doctrine of food sovereignty over the past decade, emphasizing the rebuilding of domestic food production, greater access to land and inputs for farmers, fair food prices for the producer and consumer, gender equality in agriculture, and regulation of the international agricultural trade. These principles are being applied widely: from American food banks, family farmers and environmentalists seeking to change the U.S. Farm Bill to the Landless Workers’ Movement in Brazil, who reject the Workers’ Party government’s plan to make Brazil an agro-fuels superpower, instead wanting to fulfill the dream of a Brazil in which no one is hungry. Thus, new languages, tactics, experiences, all flow out of the chaos of the Whirlwind.

If, dear reader, you can permit yourself to close your eyes, and imagine the recomposition of the global working class within the eddies of the swirling Whirlwind, you might find a North American trucker (either the redneck or trocquero variety), meeting up with a factory worker from Ho Chi Minh City sharing a cup of tea with an Egyptian street vendor. While none of the three lack brains, courage, or a heart, each of their struggles lacks something that the others can contribute to. In their encounter within the circuits of the crisis, they possess the power to transform themselves, and in so doing, transform our world.[46]

26. David Barboza. Shortage of cheap labor in China. International Herald Tribune, April 3rd, 2006.

27. Dexter Roberts. How Rising Wages Are Changing The Game In China. Business Week, March 27th, 2006.

28. A play on the Chinese government’s notion of ‘Socialism with Chinese characteristics’ – An ideological term that in reality means the adoption of the most savage aspects of capitalist economics alongside the Communist Party’s retention of authoritarian political power.

2 Responses to “Living in a Whirlwind, or the Food/Energy/Work Crisis”

Brian Marks seems to have rewritten George Caffentzis’ 1980 ‘The Work/Energy Crisis & The Apocalypse’ essay for our turbulent times, adding in a dose of fictitious capital a la David Harvey. But was/ is this analysis of (energy/capitalist) crisis accurate?

In particular the idea that the crisis imposes intensified looting (of workers) through inflation, transfering value back up to
capital-intensive forms of activity and to even riskier forms of fictitious capital seems fishy – doesn’t inflation devalue that which it loots, thus negating the value it’s supposed, here, to be transferring?

If more of the consumption fund of labour is going into purchasing the commodities workers need to reproduce their labour power, how does this effect a transfer of value? It is a form of intensified non-reproduction of labour, hence as the author says it could be termed primitive accumulation or loot, but since the cost of (not)reproducing this labor power is NOT falling in real terms, where is the value allegedly transferred coming from? (The use-values purchasable with the workers’ wage may be diminishing but this doesn’t free up value for capital to suck up; rather, the worker may just become less productive. Death as the ultimate refusal of work?) I think it would be truer to say that now loot itself is, as it were, being looted – and this is a part of the destruction, not the creation, of value…

Even if one sees the commodities bubble as involving a rush of fictitious capital into ‘real’ things, things produced through the toil of workers, the bubble character of this redirection of investment would suggest such value as is being created will soon be destroyed. On the other hand, the 30s was no doubt a field day for non-reproduction, so I can see how the current bubble may resolve into a regime of even greater working class ‘tributes’ to fictitious capital without yet re-establishing the conditions for expanded accumulation. As the author may have forgotten, the last great crisis took more than a crash to resolve – why should this crisis not follow the same trajectory toward the destruction of value on an expanding scale (ie, first depression then world war) before ‘healthy’ accumulation can resume?

The author’s autonomist bent is also problematic, eg capital’s ‘falling share of productivity’ results from ‘conditions of working class struggle’ – ie the current crisis is a result of the refusal of work (nice idea but not sure what planet the author has been living on) and produces a counter whirlwind of further refusal of work (wishful thinking, so far?). But at least he brings the politics of how the crisis is or is not resolved to the fore. This is a – so far – rare example of an attempt at plotting the impact of the crisis on workers and analysing the opposition capital is already encountering to attempts to sort its problems out at their expense. An analysis that overdoes workers’ power may be as unhelpful as one that ignores them, but at least it raises the question of what may be done to politicise the crisis (differently) and go beyond the widespread calls for regulation, or deregulation, or austerity in various flavours, that are currently
circulating on the left and beyond.

As such, and not because it is necessarily correct, I think it might be worth discussing – if only to help us sharpen a sense of what /is/ going on.

PS – I posted these points on the meltdown mailing list and got a reply from Jon Amsden who kindly agreed to me reposting it here:

Hi Benedict Seymour,

I think your analysis is right on target.
Here are some comments:

“In particular the idea that the crisis imposes intensified looting (of workers) through inflation, transfering value back up to capital-intensive forms of activity and to even riskier forms of fictitious capital seems fishy …”

The first point to note might be that severe capitalist crisis is usually a deflationary crisis. It is likely that inflation as the concomittant of economic crisis came during the period when governments attempted to maintain aggregate demand via transfer payments a la JM Keynes.

This happened in 1958, 1962, and subsequently, but when Reagan smashed the unions and the Milton Friedman reaction took place in academia and elsewhere, this phenomenon diminished momentarily. Then… along came Alan… 18 years of pouring money on economic slowdowns created the excess liquidity that has manifested itself until recently. What remains to be seen is if the collapse of sequential bubbles nee Greenspan will continue into deflation as the crisis deepens.

My guess is that this is what will happen. If it does, we will see the first deflationary crisis since the Great Depression.

“The use-values purchasable with the workers’ wage may be diminishing but this doesn’t free up value for capital to suck up; rather, the worker may just become less productive. Death as the ultimate refusal of work?”

The key phrase here is “use value.” It is likely that deflationary crisis is one where use values and exchange values
begin to come closer together. The problem is that wage earners are thrown out of the process and, as you point
out, can’t benefit. As of today some 12,000 Starbucks workers will be out of work, for example. It’s hard to see how the concept of “looting” might apply.

“As the author may have forgotten, the last great crisis took more than a crash to resolve – why should this crisis not follow the same trajectory toward the destruction of value on an expanding scale (ie, first depression then world war) before ‘healthy’ accumulation can resume?”

The destruction of value is exactly what will happen if the crisis deepens.

One dimension of this process which might be worth folding into the mix is the fact that the means of international payment is no longer commodity (gold) exchange as it was during the last great deflationary crisis.

If/when the seignorage enjoyed by the US as the operator of the system evaporates imports will be terminated, China will go
broke, and given the US need to import petroleum, the whole economy will screech to a halt. One of the most
interesting and potentially conflictual aspects of the present situation is the ongoing divergence between US and EU
policies with respect to managing the world’s money.

“The author’s autonomist bent is also problematic, eg capital’s ‘falling share of productivity’ results from ‘conditions of working class struggle’ – ie the current crisis is a result of the refusal of work (nice idea but not sure what planet the author has been living on) and produces a counter whirlwind of further refusal of work (wishful thinking, so far?)”

Important questions. It is correct to be skeptical re: the possibility of worker revolt, however, there are little signs and symptoms here and there, especially in the elite worker (Hollywood writers? actors?) sector. The service sector in the US (absent AFSCME and SEIU) has never really had the experience of mass organization similar to the industrial unionism of the 1930s…but it could happen. Keep your eye on hotels, for example!

Thanks for jumping into some economic analysis. We will need more of this from everyone on the list as the crisis deepens.